Posted on May 13, 2019
The European Commission has opened an in-depth investigation to assess the proposed acquisition of Bonnier Broadcasting by Telia Company under the EU Merger Regulation.
The Commission on Monday said it was "concerned" that the merged entity may shut out competitors from the audio-visual sector in Finland and Sweden.
Commissioner Margrethe Vestager, in charge of competition policy, said: “The in-depth investigation we are opening today aims to ensure that Telia's proposed acquisition of Bonnier Broadcasting will not lead to higher prices for or less choice of TV channels for consumers in Finland and Sweden.”
As a retail TV distributor, Telia Company licenses TV channels (including ancillary rights) from TV broadcasters, such as Bonnier Broadcasting, to include them in its retail audio-visual offering. The proposed acquisition of Bonnier Broadcasting by Telia Company would create a vertically integrated player in the audio-visual industry in Denmark, Finland, Norway, and Sweden.
In Sweden and Finland, Bonnier Broadcasting is the owner of TV channels that are very important for TV distributors to have in the packages they offer consumers, namely its free-to-air and basic pay TV channels and premium pay TV sports channels.
The Commission's initial market investigation identified the following main concerns:
- Telia Company's competitors in TV distribution in Finland and Sweden could be shut out from accessing Bonnier Broadcasting's specific TV channels that are important for consumers. This could concern any distribution platform of TV channels, namely by satellite, terrestrial networks or over the Internet. This could result in weakening the constraint currently exercised by competitors on Telia Company and could lead to higher prices of audio-visual services or less choice for consumers in Finland and Sweden.
- The merged entity could deny access to TV advertising space on its free-to-air and basic pay TV channels to Telia Company's competitors in the markets for retail mobile telecommunication, fixed internet and TV services.
- The merged entity could deny access to its streaming application to customers using competing mobile and fixed internet providers.
At this stage, the Commission is in particular concerned that, following the transaction, consumers in Finland and Sweden would face reduced choice and higher prices for retail TV distribution.
The Commission will now carry out an in-depth investigation into the effects of the transaction to determine whether its initial competition concerns are confirmed.
The transaction was notified to the Commission on 15 March 2019. The Commission now has 90 working days, until 19 September 2019, to take a decision. The opening of an in-depth investigation does not prejudge the outcome of the investigation.
On 12 April 2019, Telia Company submitted commitments to address the Commission's concerns. However, the Commission considered these commitments insufficient to clearly dismiss its serious doubts as to the transaction's compatibility with the EU Merger Regulation.
Telia Company AB, based in Sweden, is a telecommunication operator and the parent company of the Telia group. The Telia group provides mobile and fixed telecommunications services as well as broadband and television services in Denmark, Estonia, Finland, Lithuania, Norway and Sweden. It provides mobile telecommunications services in Latvia and wholesale network access (carrier services) worldwide. Telia is a publicly listed company. Telia's largest shareholder is the Swedish state, which has a 37.3% shareholding interest.
Bonnier Broadcasting Holding AB, based in Sweden, is a TV broadcasting company active primarily in Sweden and Finland, but also to a more limited extent in Denmark and Norway. Bonnier Broadcasting's TV activities are conducted through TV4 AB, C More Entertainment AB, and MTV Oy. Bonnier Broadcasting also owns the Finnish production company Mediahub and produces news and other journalism content in Sweden and Finland.
Follow EU Today on Social media: